In an article published on Jan. 7, 2016, Jamie Canup discusses 529 ABLE accounts and a recent change in tax law that allows consumers eligible to open a 529 ABLE account to select a plan sponsored by any state, rather than be restricted to their home state’s plan. Experts say that families who want to open a 529 ABLE account and maximize their contributions should open one in 2016, even if there are few plans to choose from. Annual contributions are currently capped at $14,000 per beneficiary, and each beneficiary is restricted to just one account. Canup explains, “Such limits, which are far below those that apply to 529 college-savings accounts, make it harder to amass significant savings with 529 ABLE accounts. Families may want to wait until the final months of 2016 so they can select from as many choices as possible. But they should keep an eye on offerings from other states that enter the market. If they find a plan with lower fees or better investment options they can initiate a tax-free rollover – or transfer – of their assets from one state plan to another.” For the full article, subscribers may click here.
Kristen M. Chatterton